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1957 Supreme(Cal) 30
HIGH COURT OF CALCUTTA
CHAKRABARTI, K. C. DAS GUPTA
ELECTRIC SUPPLY COMPANY OF BURDWAN LTD. - Appellant
Versus
STATE OF WEST BENGAL - Respondent
A. F. O. O. 20 Of 1956
Decided On : FEBRUARY 13, 1957
The area of supply was not included in an area for which a single local authority had been constituted, as stated by Government in the first two notices. Section 5 (a) of the Act, in so far as it requires a notice of the revocation to be served on the local authority, therefore, applies and in so far as no such notice was served in the present case on the Burdwan Municipality, the proceedings must be held to have been plainly irregular.
Headnote:
ELECTRICITY ACT - REVOCATION OF LICENCE - COMPULSORY PURCHASE - VALIDITY - AREA OF SUPPLY - NOTICE TO LOCAL AUTHORITY - BURDEN OF PROOF - MAP - EVIDENCE - TAKING OF POSSESSION BEFORE PURCHASE - LEGALITY - WRIT OF MANDAMUS - PUBLIC INTEREST - COSTS.
Fact of the Case:
The appellant company held a license for the supply of electrical energy in a certain urban or semi-urban area in Burdwan. In 1951, there were widespread complaints about the inadequacy and efficiency of the supply of energy made by the company. The Burdwan Municipality, the railway authorities, the District officials, newspapers and members of the public all appear to have joined in making complaints. Frequent breakdowns or interruptions in the supply were also alleged and it was said further that it had become impossible to obtain any new connections. These complaints, voiced in public meeting and newspapers, at last reached Government. They appear to have been satisfied that the complaints were true and that the company had been guilty of defaults for which their license might well be revoked under Section 4 (1) of the Indian Electricity Act, but instead of taking that extreme step, Government decided to proceed under Section 4 (2) and to permit the license to remain in force for some further time, subject to certain terms and conditions. A notification to that effect was issued on the 30th of September, 1954. At the end of three months, Government reviewed the working of the undertaking and came to be of opinion that the terms and conditions laid down by the notification of the 30th of September, 1954, had not been carried out and observed. Accordingly, on the 3rd of February, 1955, they issued a notice to the company, asking it to show cause why its license should not be revoked under Sub-section (1) of Section 4 of the Act. The company showed cause, but Government did not find the cause shown satisfactory. Thereupon, on the nth of March, 1955, they issued three orders or notices, one of them being a notification, another a notice and the third a letter. It is the orders contained in these communications which are being challenged in the present proceedings.
Finding of the Court:
1. The order of revocation was not passed on the ground that the further terms and conditions had not been complied within the sense that such non-compliance had created a liability for revocation, but on the ground that things, by doing which the company might avert revocation and to do which a chance had been given to them, had not been done. The original defaults had therefore not been atoned for and the revocation order was really based upon the original defaults. 2. The construction of Section 4 (2) of the Act, that Government's power to revoke a license and their power to permit the license to remain in force were mutually exclusive and, therefore, once Government decided not to revoke a license but to permit it to remain in force, they could no longer fail back on the original defaults for which the licensee had incurred a liability for revocation and revoke the license for those defaults, is not tenable. 3. The area of supply was not included in an area for which a single local authority had been constituted, as stated by Government in the first two notices. Section 5 (a) of the Act, in so far as it requires a notice of the revocation to be served on the local authority, therefore, applies and in so far as no such notice was served in the present case on the Burdwan Municipality, the proceedings must be held to have been plainly irregular. 4. The taking of possession of the assets of the licensee on the 15th of March, 1955, was not warranted by law.
Issues: 1. Whether the order of revocation was passed on the ground that the further terms and conditions had not been complied within the sense that such non-compliance had created a liability for revocation, but on the ground that things, by doing which the company might avert revocation and to do which a chance had been given to them, had not been done? 2. Whether the construction of Section 4 (2) of the Act, that Government's power to revoke a license and their power to permit the license to remain in force were mutually exclusive and, therefore, once Government decided not to revoke a license but to permit it to remain in force, they could no longer fail back on the original defaults for which the licensee had incurred a liability for revocation and revoke the license for those defaults, is tenable? 3. Whether the area of supply was included in an area for which a single local authority had been constituted, as stated by Government in the first two notices? 4. Whether the taking of possession of the assets of the licensee on the 15th of March, 1955, was warranted by law?
Ratio Decidendi: 1. The order of revocation was not passed on the ground that the further terms and conditions had not been complied within the sense that such non-compliance had created a liability for revocation, but on the ground that things, by doing which the company might avert revocation and to do which a chance had been given to them, had not been done. The original defaults had therefore not been atoned for and the revocation order was really based upon the original defaults. 2. The construction of Section 4 (2) of the Act, that Government's power to revoke a license and their power to permit the license to remain in force were mutually exclusive and, therefore, once Government decided not to revoke a license but to permit it to remain in force, they could no longer fail back on the original defaults for which the licensee had incurred a liability for revocation and revoke the license for those defaults, is not tenable. 3. The area of supply was not included in an area for which a single local authority had been constituted, as stated by Government in the first two notices. Section 5 (a) of the Act, in so far as it requires a notice of the revocation to be served on the local authority, therefore, applies and in so far as no such notice was served in the present case on the Burdwan Municipality, the proceedings must be held to have been plainly irregular. 4. The taking of possession of the assets of the licensee on the 15th of March, 1955, was not warranted by law.
Final Decision: Appeal dismissed, but appellant to have costs from respondent No. 1.
( 1 ) THIS is another of cases under Article 226 of the Constitution where the parties have not troubled to make a full and accurate disclosure of the facts and have left the Court to give its decision on considerations of a negative rather than positive character.
( 2 ) THE history of the proceeding out of which the present appeal has arisen is as follows. The appellant company used to hold a licence for the supply of electrical energy in a certain urban or semi-urban area in Burdwan. The licence was originally granted to a firm to which the company apparently succeeded. In 1951, which is said to have been shortly after the present Managing Agents had taken over charge of the concern, there was widespread complaint about the inadequacy and efficiency of the supply of energy made by the company. The Burdwan Municipality, the railway authorities, the District officials, newspapers and members of the public all appear to have joined in making complaints. It was said that the pressure was never maintained at the declared level with the result that the supply of energy was exceedingly feeble and that the light provided was not sufficient to illumine the streets even dimly and was certainly not sufficient to enable anyone to read or do any other work. Another result of the drop in the voltage, it was alleged, was that the pump-house in the waterworks could not function effectively with the result that the supply of water was very seriously affected. Frequent breakdowns or interruptions in the supply were also alleged and it was said further that it had become impossible to obtain any new connections. These complaints, voiced in public meeting and newspapers, at last reached Government. They appear to have been satisfied that the complaints were true and that the company had been guilty of defaults for which their licence might well be revoked under Section 4 (1) of the Indian Electricity Act, but instead of taking that extreme step, Government decided to proceed under Section 4 (2) and to permit the licence to remain in force for some further time, subject to certain terms and conditions. A notification to that effect was issued on the 30th of September, 1954. It first enumerated the defaults committed by the company then referred to the liability which the company had incurred for the revocation of its licence and proceeded to say that the Governor, instead of revoking the licence, would permit it to remain in force, subject to certain terms and conditions which he was imposing. Three terms were then set out and the notification concluded by saying that they would have to be complied with within a period of three months from the date of issue of the notification.
( 3 ) AT the end of three months, Government reviewed the working of the undertaking and came to be of opinion that the terms and conditions laid down by the notification of the 30th of September, 1954, had not been carried out and observed. Accordingly, on the 3rd of February, 1955, they issued a notice to the company, asking it to show cause why its licence should not be revoked under Sub-section (1) of Section 4 of the Act. The company showed cause, but Government did not find the cause shown satisfactory. Thereupon, on the nth of March, 1955, they issued three orders or notices, one of them being a notification, another a notice and the third a letter. It is the orders contained in these communications which are being challenged in the present proceedings,
( 4 ) OF the three communications issued to the company on the 11th of March, the first was a notification. It recited once again the defaults committed by the company, referred to the intermediate order by which the licence had been permitted to remain in force, subject to certain terms and conditions, proceeded to state that the terms and conditions had not been complied with and, lastly, that for such non-compliance no satisfactory cause had been-shown. The notification then concluded, by s
